Speech by the Minister of Small Business Development, Ms Lindiwe Zulu, at the Launch of the Bakgatla/Nef Small Business Development Fund, Moruleng, Pilanesberg
Programme Director, Kgosi Nyalala Pilane,
CEO of the National Empowerment Fund, Ms Philisiwe Mthethwa,
MEC for Treasury, Economic and Enterprise Development, Ms Wendy Nelson,
Distinguished guests,
Ladies and gentlemen
I am humbled and delighted to be part of this special and historic moment. Collectively, we must make a bold declaration that today marks a decisive moment in the national effort to banish poverty and unemployment, especially among the Bakgatla-ba-Kgafela.
I wish to commend the National Empowerment Fund and Kgosi Nyalala Pilane, on behalf of Bakgatla-Ba-Kgafela, for this important initiative. I am confident that this Small Business Development Fund will unleash a massive and unprecedented entrepreneurial activity in the Moruleng area.
On this important occasion, we must pay tribute to Bakgatla-Ba-Kgafela. Bakgatla have taught us that our constitutional democratic institutions can co-exist peacefully with the organs of traditional leadership, and that traditional leaders, working together with government, have the capacity and capability to lead development initiatives in their communities.
Since the advent of democracy, the democratic government has worked with relentless commitment to ensure that dikgosi occupy their rightful place as legitimate leaders of their rural communities. Government is determined to protect the legitimacy of our institutions of traditional leadership and to defend their special place in our system of democratic governance.
We understand and appreciate the important role that traditional leaders play in the ongoing national effort to push back the frontiers of poverty, particularly in the rural areas. As government engages in the task of creating a better life for all, it will continue to rely on the contribution, wisdom and guidance of traditional leaders.
However, it must be a matter of concern to all of us that, twenty years since our freedom, the triple challenges of poverty, unemployment and inequality still bear a largely black, rural and woman face. It must worry all of us, including the private sector, and move us into a collective radical action to transform our economy so that it responds to the needs of the masses of our people. Anything less is an invitation to political and social instability.
As government, we are convinced that if we are to make an impact on the job creation front, we have to invest in small and medium businesses because they are the key drivers of economic growth and job creation. The much-needed economic growth and employment opportunities will come from policy interventions that recognise that small businesses must be empowered to thrive and grow into profitable enterprises. Our point of departure is that small businesses can be the backbones of any economy and the main driver of economic growth, poverty reduction and job creation. However, the sad reality is that South Africa has one of the lowest rates of entrepreneurship activities in the world.
We remain concerned that small businesses have an exceedingly high failure rate, and the majority of the casualties are women-owned businesses. Researchers tell us that the failure rate for new businesses is almost 80% in the first year, and only about half of those who survive remain in business for the next five years. We are confident that the Academy will help to reverse this trend through appropriate research, quality teaching and a relevant curriculum that responds to the needs of the small business sector.
The Ministry of Small Business Development was established as part of a recognition of the important role this sector plays in contributing to the social and economic development of the country. In fullfilling our mandate, we will seek to promote a co-ordinated and integrated support across government spheres and institutions for SMMEs. We will pursue an aggressive entrepreneurship drive and create an enabling environment that will make it easy for South Africans, particularly the youth, to start and sustain their businesses.
As the NDP makes clear, getting South Africa onto a high-growth trajectory demands that we fundamentally change our game plan and place small businesses and co-operatives at the centre of our war against poverty, inequality and unemployment. Developing a strong and growing SME community is a cornerstone of the NDP’s vision.
We see entrepreneurship as one of the most important economic drivers. The National Development Plan (NDP) projects that 90% of new jobs will come from the SME sector. Yet we know that in South Africa entrepreneurial activity has remained relatively low, far below the global average of comparable economies, and of even more concern, that 80- 90% of new businesses fail in the first two years.
To achieve the goals as envisaged in the NDP, in the next five years, we will pay focused attention to providing effective support to small businesses, reducing obstacles to doing business wherever possible and to expand access to economic opportunities for historically excluded and vulnerable groups. Our interventions will be in the area of: access to finance, business skill development, market access, competitiveness, easing the regulatory burden and advancing localisation, particularly leveraging on public procurement. Indeed, the country’s high rate of unemployment and extreme inequality call for bold and far-sighted interventions.
We will work hard to reduce the level of bureaucracy through the adoption of the national red tape reduction programme to be implemented in all municipalities. We will improve our monitoring and evaluation measures to ensure that all weaknesses are addressed for ease of doing business for all small enterprises.
I remain convinced that, as a nation, we need to teach entrepreneurship education from primary school level right through higher education institutions. This will enable our citizens to consider starting a business as an option instead of a mindset of looking for a job after finishing high school or graduating at a higher education institution. That is why we are teaming up with FET Colleges to roll out entrepreneurship education for our students to broaden their option of employment and to include self- employment in their respective career plans. We are excited that our sister department – the Department of Basic Education– has plans in place to roll our entrepreneurship education to all schools throughout the country.
We will spearhead an entrepreneurial revolution. One of the stories that inspires me is that my grandmother. She graduated from being a hawker to a dress-maker. She was able to find a niche market. Through her efforts, and with nor institutional support or recourse, she was able to raise her children and grand-children. This is a typical South African story, where ordinary people rise up in the face of monumental obstacles.
In the last few months since my appointment as Minister, I have criss- crossed the length and breadth of our land and I have seen a nation at work to create a better life for itself. I wish to congratulate the many entrepreneurs and those who support entrepreneurs for embracing the spirit of vuku’zenzele. These are patriots who refuse to be passive recipients of services, instead they dirty their hands daily pursuing the goal of a better life.
We also pose a challenge to the mine houses in the area to come on board and be equal partners to ensure that their social and labour plans are aligned with the municipalities’ IDPs to ensure effective co-ordinated and integrated development. We want to see BaKgatla-Ba-Kgafela communities benefiting from the local economy through access to procurement opportunities from public and private sectors. It is therefore important for Bakgatla to develop strategic partnerships with provincial government departments and private sector bodies that focus on improving the livelihoods of women, youth, and people disabilities across rural and urban areas in particular.
For our part, we will ensure that SEDA provides efficient and customized small enterprise training and mentoring in this area for school leavers, co-operatives and entrepreneurs, potential entrepreneurs and emerging SMMEs, established entrepreneurs seeking to grow and enter new markets, established entrepreneurs looking at sustainable growth as well as stagnant and declining businesses trying to achieve a turn around.
It is my sincere wish that this Fund will contribute towards growing and sustaining small businesses and co-operatives in Moruleng and beyond. As government, we will remain steadfast in our quest to broaden participation to allow historically disadvantaged communities to participate in the mainstream economy. Through this fund, we will ensure that there is tangible evidence of improvements in small enterprise development in the area.
My Ministry will continue to walk this long road with Bakgatla-Ba-Kgafela because, through their practical work, they have given concrete expression to the notion of vuku’zenzele. The message that we must send to our people is that, as a department, we do not go around with money-bags. Instead, we support entrepreneurs who already have a plan and have demonstrated potential to do things for themselves.
I call on all our people, young and old, to seize opportunities created by the 1994 democratic breakthrough to improve their own lives. Together, let us move South Africa forward.
I thank you.
